Union Decertifies but Employer Must Continue Making Benefit Contributions

January 21, 2017

The Seventh Circuit Court of Appeals recently ruled that an employer violated ERISA by failing to continue to make contributions to the appropriate health and pension funds after the union had decertified. The Court held that the employer was required to continue making contributions until the expiration of the collective bargaining agreement ("CBA"). The CBA only becomes unenforceable against the union upon its decertification but it remains enforceable against the employer, according to the Court. The Court reasoned that the funds were third-party beneficiaries under the CBA and were still entitled to the contributions promised until the expiration of the CBA. This case certainly creates interesting precedent in ERISA litigation. Funds should review this case any time a union decertifies in the middle of a CBA.

 

Midwest Operating Engineers Welfare Fund v. Cleveland Quarry, No. 15-2628 (7th Cir., Dec. 20, 2016)

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